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CHAPTER 19
WARRANTIES, PRODUCT LIABILITY,
AND CONSUMER PROTECTION
Answers to Learning Objectives
(Page 210)
1. A warranty is an assurance that an article conforms to a certain standard or will operate in a certain
manner. An express warranty is a stated affirmation of fact or promise by the seller that relates to
the goods and becomes part of the basis of the bargain. An implied warranty is not the result of a
statement by the seller, but is imposed by law.
Lesson Outline
1. In making a sale, a seller often makes an assurance that the article will conform to a certain standard
or will operate in a certain manner.
2. An express warranty need not consist of any particular words to be binding on the seller. The words
“warrant” or “guarantee” need not be used.
warranty against infringement and warranty of merchantability or fitness for normal use.
8. The type of sale, such as sale of food or drink, sale of article with patent or trade name, sale on
buyer’s specifications, and sale of secondhand or used goods, may involve special considerations.
9. Warranties may be excluded or surrendered by the agreement of the parties, subject to the limitation
that such a provision must not be unconscionable.
10. In the absence of fraud on the part of the seller, or circumstances in which the law imposes a
warranty, the relationship of the seller and buyer is aptly described by the maxim of caveat emptor.
Chapter 19 Warranties, Product Liability, and Consumer Protection
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16. The protections for consumers include (a) product safety, (b) truth in advertising, (c) product
uniformity, (d) usury laws, (e) truth in lending, (f) statutes prohibiting unconscionable contracts, (g)
20. Usury laws fix the maximum rate of interest that may be charged on loans.
21. Truth in lending requires lenders to disclose the rate of interest and the total amount of
interest to be charged.
22. If the terms of a contract are so harsh or the price is so unreasonably high as to shock the con–
science of the community, the courts may rule the contract unconscionable. If a court finds a
Comments on Cases
(p. 211) The court pointed out that the statements in the description of the videos and their advertising
did not represent that the videos would last for any period of time. There was no affirmation of
fact or promise. Schreib v. Walt Disney Co., 2006 WL 573008 (Ill. Ct. App.)
(p. 214) Since there was no specific language excluding the warranty of title, there was such a warranty
in this sale. Judgment was for Rochester. Rochester Equipment & Maintenance v. Roxbury
Mountain Service, Inc., 891 N.Y.S.2d 781 (N.Y. App. Div.)
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(p. 220) The court said there was simply no contract between Glick and Caterpillar; therefore, there was
no privity. In this state privity was required where there was no personal injury. Arthur Glick
Leasing, Inc. v. William J. Petzold, Inc., 858 N.Y.S.2d 405 (N.Y. App. Div.)
F.T.C. v. Publishers Business Services, Inc., 821 F.Supp.2d 1205 (D. Nevada)
(p. 225) The court pointed out that Delaney had rejected the $1,100 service contract because it was too
expensive. He would hardly want to spend twice that amount for the same service items
included in the service contract. In this state Delaney also recovered his attorney’s fees.
Delaney v. Garden State Auto Park, 722 A.2d 967 (N.J. Super. App. Div.)
Discussion of Ethical Points
(Page 211)
While the law may not hold a seller liable for “puffing” and exaggeration about products for sale, it is a
question of ethics whether such statements should be made. The law recognizes that an earnest seller is
liable to say some things about the product that are not 100% true, but when that should be clear to the
potential buyer, there is a moral issue, not a legal one.
Answers to Questions
(Page 228)
1. A warranty is an assurance that the article sold will conform to a certain standard or will operate in
a certain manner. By making a warranty a seller agrees to make good any loss or damages that the
purchaser may suffer if the goods are not as represented.
Chapter 19 Warranties, Product Liability, and Consumer Protection
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ordinary purpose of human consumption.
6. The sale of a patent- or trade-name article does not bar the existence of a warranty of fitness for a
particular purpose or of merchantability when the buyer relied on the seller’s skill and judgment
when making the purchase.
7. Article 2A which applies to personal property leasing treats lease transactions similarly to the way
Article 2 treats sales, which includes express and implied warranty provisions. However a warranty
of possession without interference replaces the warranty of title.
8. Warranties may be excluded or surrendered by agreement of the parties as long as such an
agreement is not unconscionable.
Answers to Case Problems
(Page 229)
1. Yes. The court stated that any affirmation, once made, is part of the agreement unless there is
“clear affirmative proof” that the affirmation has been taken out of the agreement. As a result, the
Directions became part of the bargain of the parties. Weinstat v. Dentsply Intern., Inc., 103
Cal.Rptr.3d 614 (Cal. Ct. App.)
Sec. Services, Inc., 989 So.2d 1244 (Fla. Ct. App.)
5. No. The court said that the statement was the kind of comment made to give good customer
service. It did not expressly relate to any promise or assurance about the motor. Salazar v.
D.W.B.H., Inc., 192 P.3d 1205 (N.M.)
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6. No. The Fair Credit Reporting Act allows a firm offer to be conditioned on additional preexisting
internal criteria set by a lender. Dixon v. Shamrock Financial Corp., 522 F.3d 76 (1st Cir.)
7. Since the schedule was incorporated into the sales agreement it was a part of the agreement
and the hours of use were affirmations of fact made by Beadle that became part of the
Answers to Summary Cases for Part Four
(Page 232)
1. No. The court pointed out that if there were latent defects in the drill, United’s use and inspection
of it for a year before buying it did not effectively disclaim the warranty of merchantability.
2. No. The court said that the statements Apple made about the computer were generalized, non–
actionable puffery because they were vague, generalized terms and not factual statements that a
specific standard was met.
4. No. Since the invoice, signed by Lawson, that memorialized the sale stated that the tractor was sold
“AS IS” any implied warranties had been excluded.
5. No. Since any agreement Morris had regarding the return of the car was oral and since the purchase
price exceeded $500, an enforceable contract for return of the car would have to have been in
writing.